Chapter 7.2 - Restraint of Dealings: Private Caveats Flashcards
PRIVATE CAVEATS
Overview
1) Effect
2) Who can enter
3) Procedures for application
4) Procedures for entry
5) Defective private caveat
6) Removal of private caveat
PRIVATE CAVEATS
Effect of private caveats
S.322:
-
-
PRIVATE CAVEATS
Who can enter - the law
S.321
PRIVATE CAVEATS
Who can enter - person that has a claim or title to the land or registrable interest on the land
1) The law:
- S.323(1)(a)
2) Meaning of interest - Miller v Minister of Mines:
- must be registrable interests;
- i.e. S.292
3) Meaning of title & interests - Luggage Distributors v Tan Hor Teng:
- limited to registrable interests & title.
- makes claim or claims a right.
4) Meaning of caveatable interest - Score Options Sdn Bhd v Mexaland Sdn Bhd:
- interest representing that could ultimately lead to its registration;
- should be existing interest
- cannot include potential or future interest.
- caveatable interest cannot be created by agreement between parties.
PRIVATE CAVEATS
Who can enter - beneficiary under a trust
1) The law:
S.323(1)(b)
2) Residuary beneficiary - Tan Heng Poh v Tan Boon Thong:
- residuary has no caveatable interest, unless the administration of the estate has complete.
3) Non-citizen beneficiary - Brett McNamara v Kam Lee Kuan:
- a non-citizen beneficiary has caveatable interest;
- he may lodge a private caveat on the land he is entitled to as beneficiary.
4) Resulting or constructive trust - Registrar of Titles, Johor v Temenggong Securities:
- Beneficial interest arising under express, constructive or resulting trust amount to caveatable interest.
5) Trust arise in equity - Inter-Continental Mining v Societe des Estains:
- a PC may be entered to protect the rights under mining agreement;
- a trust is presumed to have arisen in equity as claimant has entered the land & spent a huge amount money to commence mining operations pursuant to the agreement.
PRIVATE CAVEATS
Who can enter - guardian or next of kin of beneficiary
The law:
S.323(1)(c)
PROCEDURES FOR APPLICATION OF PC
The law
S.323(2):
- Form:
- Attestation:
PROCEDURES FOR APPLICATION OF PC
Contents of application - nature of claim
Tan Heng Poh v Tan Boon Thong:
- application must state whether the claim is binding on the land itself or binding a particular interest.
- failure will render the caveat legally unsustainable.
PROCEDURES FOR APPLICATION OF PC
Contents of application - error on essential details
Wong Fok Seng v Mrs Fredericks Nee Khoo Swee Choo:
- Error in stating the proprietor’s name as the person executing Form 19B was fundamental error going to the root of the caveat;
- Fundamental error in the attestation clause in Form 19B renders the form & caveat a nullity.
PROCEDURES FOR ENTRY OF PC
The law
S.324
- Note:
- Entry:
- Effecting:
- Service:
DEFECTIVE CAVEATS
Overview
1) Grounds for defect
2) Effect of defective caveat
3) Duty of court
DEFECTIVE CAVEATS
Grounds for defect
1) Non-compliance with S.232(2) - Tan Heng Poh v Tan Boon Thong:
- failure to state nature of claim renders the caveat defective.
2) Essential errors in form 19B - Wong Fok Seng v Mrs Fredericks Nee Khoo Swee Choo:
- Error in stating the proprietor’s name as the person executing Form 19B was fundamental error going to the root of the caveat;
- Fundamental error in the attestation clause in Form 19B renders the form & caveat a nullity.
DEFECTIVE CAVEATS
Effect of defective caveat
1) Not bound to amend:
- court is not bound to amend or modify to save the caveat.
2) No power to allow amendment:
- court has no power to allow amendment simply by supplemental affidavits.
DEFECTIVE CAVEATS
Duty of court
Tan Heng Poh v Tan Boon Thong:
- in deciding whether a caveat is defective or not, court shall confine itself to the caveat & other supporting documents.
- where necessary, court may not order for removal but amendment under S.327(1) to protect the right of caveator.
REMOVAL OF CAVEATS
Overview
1) By caveator
2) By Registrar
3) Issues
4) By court
REMOVAL OF CAVEATS
By Caveator
S.325:
- When:
- Form:
- Attestation:
- Fee:
- Notice:
- Sign & seal:
REMOVAL OF CAVEATS
By Registrar
S.326:
- By whom:
- Form:
- Attestation:
- Notice:
- Time limit:
- Service:
REMOVAL OF CAVEATS
Issues - removal by unregistered applicant
Tan See Hock v D&C Bank Sdn Bhd:
- application by unregistered chargee is held to be bad;
- subsequent issuance of notice in Form 19 is held to be ultra vires.
REMOVAL OF CAVEATS
Issues - defective service of notice
Alagarsamy v Tai Phaik Khee:
- removal will be invalid if there is no service of notice or unsuccessful attempt of notice;
- in such a case, the notice is deemed to be unserved & removal of caveat is invalid.
REMOVAL OF CAVEATS
By court - overview
1) Procedures
2) Meaning of aggrieved party
3) Examples of aggrieved party
4) Ex-parte application
5) Grounds for removal
6) Test for removal
REMOVAL OF CAVEATS BY COURT
Procedures
S.327
REMOVAL OF CAVEATS BY COURT
Meaning of aggrieved party
RAP Nathan v Haji Abdul Rahman bin Haji Yusoff:
- aggrieved means something wrongful in law which has been done that affects their title or property or cause them loss if the caveat is not removed.
REMOVAL OF CAVEATS BY COURT
Example of aggrieved party - registered chargee
Oversea-Chinese Banking Corp Ltd v Konsortium Utama Sdn Bhd:
- registered chargee is treated as an aggrieved party as he has an indefeasible interest in the land.
REMOVAL OF CAVEATS BY COURT
Example of aggrieved party - purchaser at judicial sale
Gondola Motor Credit Sdn Bhd v Almurisi Holdings Sdn Bhd:
- successful purchaser who had paid deposit or full purchase price & in possession of valid certificate of sale is recognised as an aggrieved party.
REMOVAL OF CAVEATS BY COURT
Example of aggrieved party - co-proprietor
Rohaya bte Ibrahim v Yusof bin Ibrahim:
- co-proprietor who is unable to perform his obligation under SPA due to the existence of caveat is also an aggrieved party.
EX-PARTE APPLICATION
The law
UMBC v Chan Yee Chung:
- Applicant who applies for removal ex parte must serve the application to the caveator;
- caveator should be given an opportunity to attend hearing & resist the application.
GROUNDS FOR REMOVAL OF CAVEAT
Overview
1) No caveatable interest
2) Disruption of co-owner’s right
3) Failure to disclose material facts
4) Inordinate delay
5) Pecuniary interest
6) JV or project management agreement
GROUNDS FOR REMOVAL OF CAVEAT
no caveatable interest
Omar bin Mat Ziki v Mokhtar bin Amin:
- court will order for removal if caveator fails to prove his caveatable interest.
GROUNDS FOR REMOVAL OF CAVEAT
disruption of co-owner’s right
Hasiah bt Mat v Johanariffin bin Din:
- court will order for removal if the caveat impedes a co-owner from effecting a lawful termination of the co-proprietorship of the land.
GROUNDS FOR REMOVAL OF CAVEAT
Failure to disclose material facts
Ooi Bee Tat Development v Ooi Bee Lee:
- failure to disclose material facts during ex parte application warrants a ground for removal of caveat.
GROUNDS FOR REMOVAL OF CAVEAT
Inordinate delay
Tanjung Rhu Land v Mamlaka Langkawi Sdn Bhd:
- Inordinate delay in entering caveat w/o reasonable explanation will result in claim being vexatious;
- this can afford a ground for removal of caveat.
GROUNDS FOR REMOVAL OF CAVEAT
Pecuniary interest
Institut Teknologi Federal Sdn Bhd v IIUM Education:
- mere pecuniary interest in land does not entitle a person to lodge a caveat.
GROUNDS FOR REMOVAL OF CAVEAT
JV or project management agreement
Score Options Sdn Bhd v Mexaland Development Sdn Bhd:
- rights acquired under JVPM does not amount to caveatable interest;
- i.e. the rights only give rise to a monetary interest or right in personam, not right to lodge a caveat.
TEST FOR REMOVAL OF CAVEAT
3-stages test
Luggage Distributors v Tan Hor Teng:
1) Stage 1 - cavetable interest - Macon Engineers Sdn Bhd v Goh Hooi Yin:
- caveator must prove that he has caveatable interest;
- if he does not have sufficient CI, caveat will be removed.
2) Stage 2 - serious issue to be tried - Eng Mee Yong v Letchumanan:
- caveator must show that based on affidavits filed, his claim discloses a serious question to be tried meriting a trial;
- no “prima facie” proof is required;
- court should only decide based on affidavits.
3) stage 3 - balance of convenience - Hock Seng Mining v Datuk Setia Hj Abdul Ghani:
- balance of convenience will not lie in favour of permitting the caveat remains if:
- – proceedings have been brought timeously by the caveator;
- – caveator’s claims can be satisfied by an alternative claims for damages
- in such a circumstance, balance of convenience will lie in favour of removing the caveat.
MISCELLANEOUS
Overview
1) Competing registrable interest
2) Requirements of notice
3) Compensation for damages for wrongful entry
4) Second caveats
COMPETING REGISTRABLE INTEREST
Overview
1) general
2) no inducement
3) notice
4) registered vs equitable interest
5) recent application
COMPETING REGISTRABLE INTEREST
General
- court has always resolved to equitable principles of qui prior est temporem potior est jure;
- i.e. he who is earlier in time is stronger in law.
COMPETING REGISTRABLE INTEREST
No inducement
UMBC v Goh Tuan Lye & Ors:
- prior claimant will maintain his priority;
- this is so if he has not induced subsequent claimant to act on his detriment.
COMPETING REGISTRABLE INTEREST
notice
Harun v Mah:
- if the prior claimant has not given notice of his prior claim & thereby induce subsequent claimant to act on a belif that there is no existing prior claim, his position will be postponed to that subsequent claimant.
COMPETING REGISTRABLE INTEREST
registered vs equitable interest
2013
Wong Wee Kheong v Daya Bersama Sdn Bhd:
- registered interest will always prevail over an equitable interest;
- determination of priority should be at the current date.
COMPETING REGISTRABLE INTEREST
recent application
FC, 2018
See Leong Chye & Aor v United Overseas Bank:
- competing interest of the parties must be determined on the facts of particular case;
- court must take into account the application of S.340 as a whole.
REQUIREMENTS OF NOTICE
Actual notice
Zeno Ltd v Prefabricated Constructions:
- Actual notice must be given by way of the entry of a caveat on the register;
- Failure constitutes negligence & defeats equity.
REQUIREMENTS OF NOTICE
Constructive or imputed notice
Vallipuram Sivaguru v Palaniappa Chettiar:
- May be given by way of taking possession of the land or the IDT, even though no caveat has been entered.
COMPENSATION FOR DAMAGES ON WRONGFUL ENTRY
Overview
1) The law
2) Entitlement of damages
3) What claimant has to prove
COMPENSATION FOR DAMAGES ON WRONGFUL ENTRY
The law
S.329(1)
COMPENSATION FOR DAMAGES ON WRONGFUL ENTRY
Entitlement to damages
Quill Constructions Sdn Bhd v Tan Hor Teng:
- wrong or unlawful entry;
- malicious entry;
- failure to withdraw;
- actual loss, real & reasonable.
COMPENSATION FOR DAMAGES ON WRONGFUL ENTRY
What claimant has to prove
Cheng Chin Hing v Shak Eng:
- PC entered was wrong or w/o reasonable cause;
- the claimant had suffered damages or losses as a result of lodgment of PC.
SECOND CAVEATS
Overview
1) The law
2) Fresh entry for bona fide purpose
3) Voluntary removal
SECOND CAVEATS
The law
S.329(2)
SECOND CAVEATS
Fresh entry for bona fide purpose
Thevathason v Kwong Joon:
- fresh entry may be allowed upon expiry of 6 years;
- the entry must be for bona fide purpose of protecting the caveator’s interest of the same land.
SECOND CAVEATS
Voluntary removal
Hip Yiak Trading Sdn Bhd v Hong Soon Seng Sdn Bhd:
- caveator who has entered a caveat, subsequently withdrew the caveat, is not prevented from entering a new caveat.
